Market Diversification - Brexit Action Plan Bord Bia's 4TH E DITION: SE PTEMBE R 2020
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Bord Bia’s Brexit Action Plan Market Diversification 4 T H E D I T I O N : SE P TE MBE R 2 02 0
Bord Bia’s Brexit Action Plan The UK has left the European Union. It is now in the Transition Period until the 31st of December 2020, during which it remains in the Single Market and Customs Union. The ratification of the Withdrawal Agreement by both the EU and the UK in October 2019 means that there will be permanent changes to the trading relationship between the EU and GB from the 1st of January 2021. From next year there will be customs Northern Ireland Protocol and regulatory controls on trade The EU-UK Withdrawal Agreement including trade in agri-food products includes a dedicated Protocol on between the EU and UK, excluding Ireland and Northern Ireland. The Northern Ireland. The details and scope Protocol ensures that there will be no of the customs and regulatory controls regulatory controls on trade moving on trade in goods between EU/Ireland between Ireland and Northern Ireland, and UK will be defined based on the other than those already in place. The successful conclusion of negotiations Protocol applies even if there is no trade on an EU-UK Free Trade Agreement agreement between the EU and the UK. or in the absence of an FTA based on application of WTO MFN trading rules for Third Country trade. However, what is certain is that these new Controls will add costs, delays and complexity to the supply chains of Irish food and drinks manufacturers. 2
Bord Bia’s Brexit Action Plan
Urgent actions required to prepare for
January 2021
Bord Bia’s Readiness Radar and Brexit from 2021, this Brexit Action Plan is through potential next steps and other
Barometer have both played a vital role an important resource to ensure your considerations in their Brexit planning.
over the past three years in enabling business is prepared for these changes.
Irish food and drink manufacturers to
identify, assess and prepare for the This is the Fourth Edition of Bord
challenges that businesses face as a Bia’s Brexit Action Plan and provides
result of Brexit. Both risk diagnostic practical information that Irish food
tools focus on six key risk areas related and drink manufacturers can utilise
to Brexit: Customer Relationships, in order to prepare for increased
Supply Chain, Customs and Controls, complexity in future trade with the
Financial Resilience, Market UK. It addresses actions companies
Diversification and Emerging Risks. should take in two scenarios: a future
Free Trade Agreement (FTA) between
It is positive to note that as of April the EU and the UK (still to be defined
2020, over 91% of Readiness Radar as it is currently under negotiation)
respondents said they had made and No Agreement, whereby the UK
progress in relation to their Brexit and EU will trade on WTO terms. Bord
preparedness over the past 12 months. Bia’s support services, along with other
The results show that only a small State supports, can be found listed at
number of companies report having the end of each chapter. Each chapter
made no progress in the past year. provides step-by-step guidance on the
Looking to the rest of 2020 and the six risk areas and is accompanied by
permanent changes coming into effect a checklist to help guide companies
SUMMARY OF ACTIONS
1. Identify potential markets for expansion (access
Bord Bia’s Market Prioritisation Reports)
2. Develop a comprehensive market strategy for the
selected market
3. Localise your product range
4. Activate your market diversification plans (Attend
a Trade Fair and/or Trade Mission)
3Bord Bia’s Brexit Action Plan Market Diversification This focuses on key actions to guide Irish food and drink manufacturers on developing a strategy for expanding into new geographies. The Irish food and drink industry has sustained its position as by far the most global of Ireland’s indigenous industries, with its products finding markets in over 180 countries. However, there are challenges facing manufacturers as they aim to unlock the value that market diversification can deliver. These challenges have intensified due to the global supply chain challenges arising from Covid-19. Efforts to diversify growth into new markets as a response to Brexit have also brought these risks into sharp focus. 4
Bord Bia’s Brexit Action Plan
Market selection considerations
Prior to entering a new market, a robust commercial marketing strategy should be
developed. The following details should be taken into account when considering and
prioritising markets for exports:
Market Projection Ease of doing business
• Population • Ease of doing business ranking
• Income per capita • Ease of logistical access
• Import demand for my product(s) • Market access status
• Currency trends
Market size and trends Imports
• Urbanisation • Import levels by category /
• Rate of growth in the food market subcategory
• Consumer market trends • Import price levels
• Wider market trends and major • Import Duties and VAT
cultural considerations
“Prior to entering a
new market, a robust
commercial marketing
strategy should be
developed.”
5Bord Bia’s Brexit Action Plan
Expanding into new markets Geographies: Channel and customer
According to the Readiness Radar, 71% • Are you aware of local VAT, duties, • Have you recently visited this
of respondents are actively seeking to taxes and quotas for your product in market, the relevant channels
expand into new markets in response to the market? and likely target stores, in order
Brexit. Expansion into new geographic to experience it for yourself?
• What exchange rate effects would
regions requires thorough analysis and
you need to take into consideration • Do you need industry
planning. A comprehensive market
in this market? certifications to be able
strategy provides a clear set of criteria
to access key channels or
and targets to help organisations make • Does your labelling, ingredients list,
customers in this market? (E.g.
the required change as efficiently as nutritional declaration and shelf life
BRC, ISO standards).
possible. meet the market requirements?
• What are the target customer’s
The five questions below should be • How would you need to resource
margin expectations in this
used to begin creating your commercial this market in order to succeed?
market? What minimum life on
marketing strategy: E.g. current sales team based in
receipt (MLOR) is expected by
Dublin, dedicated resource based in
1. Where do I want my business to be? the retailer in this market and
Ireland or UK, Bord Bia Fellow, agent/
2. Where is my market heading? what type of distribution partner
distributor or other.
would you need to achieve this?
3. Where should I focus?
• Would you need a quality/technical
4. What is my value proposition? • What systems do the customers
manager who speaks the language of
use to plan, list products, book
5. How will I unlock my opportunities? the market?
promotions, etc., and how do you
52% of Readiness Radar respondents • What is your delivery lead time/time get trained on them?
have a marketing strategy specifically to market?
developed for non-UK export markets.
• What marketing/promotional
A business should look in detail at the
support would customers expect?
following areas to inform their strategic
choices when looking at export markets: • What is your target customer’s
margin expectation? Does your
Category: pricing structure enable you to meet
this?
• Have you clearly defined the
category that you are operating in • How does your target customer view
and the role of your product within your competition?
the category? • What is the value of listing your
• Do you have latest data on the range to the customer in comparison
category you are targeting? to current listings in this category?
Are you familiar with the different
• Is your proposed pricing competitive
store formats that exist in this
within the category?
market?
• Do you know who the main
• Once these questions have been
competitors are and how they are
answered and your business has a
performing?
basis for market diversification, you
• Are you clear on how your offer adds should look in detail at the following
value to the category and what your areas to inform your strategic
product uniquely brings? choices:
• Have you visited the market to
familiarise yourself with it and the
consumer?
6Bord Bia’s Brexit Action Plan
Brands and products Localising your product range Labelling
• Will you need to customise your There are practical factors, such as the Product labelling laws and regulations
products for this market? local regulatory environment, language can differ from country to country. In
and general market and cultural Europe, EU food regulations cover all
• Do you know standard pack sizes
nuances, which will play a vital role in the directives that you need to follow
for the category? Will your existing
shaping your success overseas. to stay compliant with local regulatory
packaging fit on the shelves
regimes. However, some European
and does it meet local recycling There are practical factors, such as the
countries may have laws that go even
requirements (if any)? What is local regulatory environment, language
further than the EU regulations. Ensure
your unique selling proposition and general market and cultural
you check for any additional regulations
(USP) and how do you differ from nuances, which will play a vital role in
in your target market.
your competition? Do you have shaping your success overseas. These
the necessary accreditations? details are key to designing a product Language
I.e. BRC global standards, range that can succeed in the new
From a regulatory perspective, what
SALSA (safe and local supplier market, namely:
elements of your packaging must be in
approval), organic certification,
Brand the local language? What do consumers
International Featured Standards
Is your brand name understood by need to be able to understand about
(IFS), halal or other International
consumers in the new market? Does the what you bare offering and how it
Organisation for Standards (ISO).
brand name have the same meaning? If answers customer needs about your
Does your labelling, ingredients
not, do you need to adapt your brand or product from how it is packaged to
list, nutritional declaration and
develop an export or channel specific brand name and description?
shelf life meet the local market
brand? You will also need to consider
requirements?
how to protect your brand name (and
• What MLOR can you guarantee to logos) in this market and check you
the retailer? are not infringing on another brand’s
• What are your minimum order intellectual property.
quantities for an existing stock Range
keeping unit (SKU)? Or for a SKU
Consider how many SKUs or product
that needs recipe and packaging
variants you are going to include
localisation for an export market?
in your range. Assess the taste and
• Do you have the desire and texture which consumers prefer in
capability to modify your products your category and adapt your range to
based on local market preferences? meet local preferences. Research the
• What is your global location product specifications which customers
number (GLN)/factory code? in your target channel prefer. Bord Bia’s
Thinking House can provide valuable
• Do you outsource your production?
insight in this area.
What are your three priority
commitments/targets under Pack Size
Origin Green? Will these deliver a There can also be nuances in preferred
competitive advantage? Will they pack size in different markets and it
deliver a consumer benefit and/or is important that you take these into
USP? consideration. Answer questions such
as: What size should your product be to
appeal to consumers and customers’
needs in the new market? How many
servings does the shopper or operator
need to get out of the pack?
7Bord Bia’s Brexit Action Plan
Market Diversification Checklist
The following checklist will help you establish a
strategic market diversification plan.
IMPLEMENTED
REVIEWED DRAFTED A
CHANGE
‘BUSINESS AS PLAN FOR
FOR BREXIT-
USUAL’ IMPROVEMENT
PROOFING
Carry out extensive market research in order to identify
where the opportunity lies, and which market should be
selected for expansion.
Establish a comprehensive market diversification strategy.
Localise your product range to the market selected for
expansion.
Utilise Bord Bia’s Engagement Activity Prioritisation Tool in
order to activate your market diversification strategy.
8Bord Bia’s Brexit Action Plan
Market Diversification Supports
Bord Bia Supports weighted, allowing for a list of the top register your interest, please contact
30 markets for each food and drinks your Sector Manager.
Bord Bia’s Readiness Radar category. Through ongoing consultation
In July 2020 Bord Bia launched the with industry, Bord Bia has identified Bord Bia’s Logistic Partner Database
Readiness Radar, which is a risk 15 priority markets for meat, dairy, The Logistic Partner Database
diagnostic tool developed to assess prepared consumer foods, beverages enables Irish companies to identify
industry thinking and performance and seafood. 75 summary reports logistics service providers operating
around a number of priority risks have been published for each market both in-market and internationally.
and challenges. These include and sector, outlining the scale of the The database covers the UK, France,
Covid-19, Brexit, Challenges to Market opportunity, level of competition and Germany, the Netherlands, Poland and
Diversification, Sustainability Pressures, any barriers likely to face Irish exporters. Spain. Simply select a supplier type from
Consumer Insights and Innovation, and the drop-down menu to begin. Your
Talent Management. Building on from the market search can be customised by company
prioritisation exercise, each sector name, country or product category
It enables Irish food and drink
has developed a three-year strategy such as (ambient, chill or frozen) and
manufacturers to prioritise and assess
for 2019-2021, in line with Bord Bia’s by service (type such as transport or
their own company specific risks facing
Statement of Strategy. The strategies warehousing).
their businesses.
inform sector focus and the key priority
markets.
Export Assistance
Readiness Radar Gap Analysis Please contact your relevant Sector
The total value of Irish food, drink and
Report Manger to discuss further.
horticulture exports in 2019 was €13bn.
Each client company that completed In support of this, Bord Bia has a large
Commercial Marketing Strategy
the Readiness Radar received a Gap range of programmes and actions in
Development
Analysis Report. The Gap Analysis place, to assist businesses with their
Report enables you to understand your This service assists client companies
export operations.
risk exposure and level of preparedness in the development of a commercial
across the six key challenges outlined marketing strategy for their business. These supports include information on
in the Readiness Radar: Covid-19, Brexit, This involves making choices around foreign markets, distribution channels,
Challenges to Market Diversification, Where to Play (which market, category, a range of Distributor Guides, as well
Sustainability Pressures, Consumer channel, customer etc.) and How to as in-market trade shows, Consumer
Insights and Innovation, and Talent & Trade promotions (EU & Bord Bia
Win (developing a value proposition
Management. promotional campaigns) to promote
and marketing objectives to deliver
the strategy). The service is delivered products and of course our flagship
Bord Bia’s Market Prioritisation through a mix of workshops, one-to- programme, Origin Green.
Exercise ones and online supports. Visit www.
Bord Bia has undertaken an in-depth bordbia.ie for more details.
Market Prioritisation exercise focussing
on identifying relatively newer markets Key Customer Management
likely to present growth opportunities
over the next 5 – 10 years. A funnel This Bord Bia service is designed to
approach was adopted for the project, develop client capability in managing
with an initial screening of over 180 accounts with key trading customers (in
markets. Macro-economic and sector Retail/Food Service/Manufacturing) to
specific criteria was assessed and deliver sustainable, long term business
growth. For further information and to
9Bord Bia’s Brexit Action Plan
Think Digital Trade Fairs
Think Digital aims to boost the digital Every year Bord Bia attends
capabilities of Irish food and drink international trade fairs covering a wide
manufacturers and raise awareness of range of sectors, with the goal of driving
the possibilities that digital can add to business opportunities for clients and
their Commercial Marketing Strategy. raising the awareness of Brand Ireland.
This service can support companies that For further information on how to join
are looking to enter new markets where these trade fairs, please contact your
digital activity is a necessary or integral Sector Manager or go to the designated
factor in business growth. Trade Fairs page on the Bord Bia
For more information contact: website.
adam.baker@bordbia.ie
Trade Missions
Virtual Trade Missions and Online
Bord Bia works with industry to prioritise
Trade Shows
high potential markets and organises
International travel restrictions and
Trade Missions with the Department
ongoing social distancing guidelines
of Agriculture, Food and the Marine.
has necessitated Bord Bia to revaluate
A Trade Mission will typically have
its trade engagement strategy and
sectoral priorities and common key
planning for the remainder of2020. As
business objectives and outputs.
such Bord Bia has a new hybrid offline/
These focus on market access, raising
online alternative programme of events.
awareness of Brand Ireland and driving
This will ensure sustained engagement
business opportunities for Irish food
to build Ireland’s reputation as a
and drink manufacturers. For further
sustainable source of food in new
information on how to join these Trade
markets worldwide, develop market
Missions, please contact your Sector
understanding for client companies,
Manager.
and foster connections with prospective
business partners.
For more information contact: Weekly Brexit Alert
info@bordbia.ie Informs latest Brexit developments in
the UK Market and implications for
Perfecting the Virtual Pitch the Irish Food & Drink sector. As part
This workshop programme assists Irish of the weekly FoodAlert Newsletter
food and drink exporters with preparing highlighting emerging trends in food
for virtual pitches to grow business and drink and how those trends are
during the disruption arising from manifesting in different markets.
Covid-19. Newsletter also links to Bord Bia’s
pricing pages. Used by clients to stay
For more information contact:
abreast of latest developments in
adam.baker@bordbia.ie
categories and in market.
Sign up at www.bordbia.ie/industry/
news/food-alerts/
10Bord
Bord
Bia’s
Bia’s
Brexit
Brexit
Action
Action
Plan
Plan
11Bord Bia’s Brexit Action Plan 12
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